Today, technology investments play a key role in a company's success story, and acquiring digital solutions requires close cooperation between the company's financial and IT administration. However, a Gartner study reveals that only one in three companies has a CFO and a CIO pulling together. Our guest writer, development consultant Jesse Ahokas from Dooap's partner Efima, contemplates how to get CFOs and CIOs to join forces.
The CFO and the CIO are like two superheroes – they work hard behind the scenes daily, each on their own ensuring the company's performance. The CFO is responsible for financial planning and performance, while the CIO is tasked with ensuring systems that serve the needs of the business. In everyday life, their work is rarely noticed, but in situations of change, crises, and rapid growth, they put on their superhero cloaks and point the way for change.
"A confrontation does not serve either one’s purpose."
Unfortunately, in many organizations, however, this superhero duo of the management team does not share the same battles and goals (Gartner 2022). The collaboration between the CFO and the CIO has traditionally been overshadowed by various conflicts of interest: one of them arrives at the management team meeting with a savings list and the other with an investment list in hand. For the CFO, IT projects promoted by ICT management often appear mainly as expense items that must have a measurable payback period, while the CIO is more interested in the strategic benefits of technology investments and their potential to accelerate business growth. However, a confrontation does not serve either one’s purpose. Today, data and technology investments play an increasingly important role in a company's competitive advantage and value creation, and the wisest CFOs and CIOs are investing in building effective collaboration and common goals instead of counter-argumentation.
A common enemy unites even the oldest of foes
But how to find a common direction? From superhero stories, we have all learned that nothing unites more than a common archenemy. The CFO and CIO have a common challenge to tackle in most organizations: siloed data.
Typically, data is fragmented in organizations and located in many unconnected systems. More data accumulates in the systems than before, and at the same time expectations for the utilization of data are growing – in which case the eyes often turn to both the CFO and the CIO. What unites them is a common goal: data must be brought together, aiming at the principle of one truth.
If the pair is unable to defeat their common archenemy, the result will not be world destruction, but it can damage the company's competitiveness. Fragmented and inconsistent data leads to inefficient decision-making and, at worst, bad decisions. Reacting quickly to changing market situations is challenging without up-to-date, accurate information. Siloed data and lack of an overall picture can also lead to lower productivity if it is not possible to analyze the long business processes that pass through different organizational units and departments. In addition, reporting based on incorrect and incomplete information can cause reputational damage to the company and damage relations with stakeholders.
In a joint battle, both are needed
In the final battle between the heroes and the archenemy, both CFO and CIO superpowers are needed. Fortunately, they both have important capabilities to help their organization:
- The CFO has a unique capability and understanding of the financial situation and data of the entire organization, based on which to make informed decisions.
- The CIO has the ability to integrate systems to ensure that the utilization of all data provides a single, organization-wide truth.
- By combining their superpowers, the CFO and the CIO enable superior capabilities to leverage data, enabling a comprehensive, accurate, and real-time view of the entire organization. Ideally, storytelling can be used to make complex data more understandable and thus easier to communicate. This means that data can be used effectively to support strategic decision-making and plan the necessary development measures.
However, even the most powerful superpowers are of no use unless they are put into practice. Here’s a list of things to consider so CFOs and CIOs can get one step closer to achieving their common goal:
- Defining common goals and priorities: Build a continuous dialogue between financial management and information management. One way is to hold regular CFO-CIO meetings to review both organizations' plans and projects and identify potential overlaps, conflicts, and opportunities for synergies.
- Defining common key metrics: With technology investments, it's important to define key metrics based on your company's strategy and business goals. Through business-driven, shared metrics, the CFO and the CIO gain visibility into the effectiveness of technology investments and can jointly assess success.
- Data-related systems: By investing in a modern data platform, the CFO and the CIO can ensure that data from different sources can be combined and managed not only consistently, but also efficiently.
- Data management policies and guidelines: The CFO and the CIO should encourage their organizations and the company as a whole to follow commonly agreed principles and procedures in data management. Policies can be used to define a top-level framework, and more detailed guidelines and employee training will implement the practices.
Finally, even superheroes cannot survive without supporting troops – neither in stories nor in the business world. Not all of us have the capabilities of a CFO or CIO, let alone the ability to fly or move at a lightning-fast pace. However, we can all be everyday heroes and do our part actively sharing information and working together towards common goals, avoiding siloing within the organization.
